1406 - Distributions from Pennsylvania Race Horse Development Fund.
§ 1406. Distributions from Pennsylvania Race Horse Development Fund. (a) Distributions.--Funds in the Pennsylvania Race Horse Development Fund are hereby appropriated to the department on a continuing basis for the purposes set forth in this subsection and shall be distributed to each active and operating Category 1 licensee conducting live racing as follows: (1) An amount equal to 18% of the daily gross terminal revenue of each Category 1 licensee shall be distributed to each active and operating Category 1 licensee conducting live racing unless the daily assessments are affected by the daily assessment cap provided for in section 1405(c) (relating to Pennsylvania Race Horse Development Fund). In cases in which the daily assessment cap affects daily assessments, the distribution to each active and operating Category 1 licensee conducting live racing for that day shall be a percentage of the total daily assessments paid into the Pennsylvania Race Horse Development Fund for that day equal to the gross terminal revenue of each active and operating Category 1 licensee conducting live racing for that day divided by the total gross terminal revenue of all active and operating Category 1 licensees conducting live racing for that day. Except as provided in paragraphs (2) and (2.1), the distributions to licensed racing entities from the Pennsylvania Race Horse Development Fund shall be allocated as follows: (i) Eighty percent shall be deposited weekly into a separate, interest-bearing purse account to be established by and for the benefit of the horsemen. The earned interest on the account shall be credited to the purse account. Licensees shall combine these funds with revenues from existing purse agreements to fund purses for live races consistent with those agreements with the advice and consent of the horsemen. (ii) For thoroughbred tracks, 16% shall be deposited on a monthly basis into the Pennsylvania Breeding Fund as defined in section 223 of the Race Horse Industry Reform Act. For standardbred tracks, 8% shall be deposited on a monthly basis in the Pennsylvania Sire Stakes Fund as defined in section 224 of the Race Horse Industry Reform Act, and 8% shall be deposited on a monthly basis into a restricted account in the State Racing Fund to be known as the Pennsylvania Standardbred Breeders Development Fund. The State Harness Racing Commission shall, in consultation with the Secretary of Agriculture by rule or by regulation, adopt a standardbred breeders program that will include the administration of Pennsylvania Stallion Award, Pennsylvania Bred Award and a Pennsylvania Sired and Bred Award. (iii) Four percent shall be used to fund health and pension benefits for the members of the horsemen's organizations representing the owners and trainers at the racetrack at which the licensed racing entity operates for the benefit of the organization's members, their families, employees and others in accordance with the rules and eligibility requirements of the organization, as approved by the State Horse Racing Commission or the State Harness Racing Commission. This amount shall be deposited within five business days of the end of each month into a separate account to be established by each respective horsemen's organization at a banking institution of its choice. Of this amount, $250,000 shall be paid annually by the horsemen's organization to the thoroughbred jockeys or standardbred drivers organization at the racetrack at which the licensed racing entity operates for health insurance, life insurance or other benefits to active and disabled thoroughbred jockeys or standardbred drivers in accordance with the rules and eligibility requirements of that organization. (2) Beginning January 1, 2010, and for the remainder of fiscal year 2009-2010, distributions from the Pennsylvania Race Horse Development Fund shall be allocated as follows: (i) Each week, 34% of the money in the Pennsylvania Race Horse Development Fund shall be transferred to the General Fund. (ii) Each week, 66% of the money in the Pennsylvania Race Horse Development Fund shall be distributed to each active and operating Category 1 licensee conducting live racing in accordance with the following formula: (A) Divide: (I) the total daily assessments paid by each active and operating Category 1 licensee conducting live racing into the Pennsylvania Race Horse Development Fund for that week; by (II) the total daily assessments paid by all active and operating Category 1 licensees conducting live racing into the Pennsylvania Race Horse Development Fund for that week. (B) Multiply the quotient under clause (A) by the amount to be distributed under this subparagraph. (iii) The distribution under subparagraph (ii) shall be allocated as follows: (A) The greater of 4% of the amount to be distributed under subparagraph (ii) or $275,000 shall be used to fund health and pension benefits for the members of the horsemen's organizations representing the owners and trainers at the racetrack at which the licensed racing entity operates for the benefit of the organization's members, their families, employees and others in accordance with the rules and eligibility requirements of the organization, as approved by the State Horse Racing Commission or the State Harness Racing Commission. This amount shall be deposited within five business days of the end of each week into a separate account to be established by each respective horsemen's organization at a banking institution of its choice. Of this amount, a minimum of $250,000 shall be paid annually by the horsemen's organization to the thoroughbred jockeys or standardbred drivers organization at the racetrack at which the licensed racing entity operates for health insurance, life insurance or other benefits to active and disabled thoroughbred jockeys or standardbred drivers in accordance with the rules and eligibility requirements of that organization. The total distributions for health and pension benefits for fiscal year 2009-2010 shall not exceed $11,400,000. (B) Of the money remaining to be distributed under subparagraph (ii) after application of clause (A), the following disbursements shall be made: (I) Eighty-three and one-third percent of the money to be distributed under this clause shall be deposited on a weekly basis into a separate, interest-bearing purse account to be established by and for the benefit of the horsemen. The earned interest on the account shall be credited to the purse account. Licensees shall combine these funds with revenues from existing purse agreements to fund purses for live races consistent with those agreements with the advice and consent of the horsemen. (II) For thoroughbred tracks, 16 and 2/3% of the money to be distributed under this clause shall be deposited on a weekly basis into the Pennsylvania Breeding Fund established in section 223 of the Race Horse Industry Reform Act. For standardbred tracks, 8 and 1/3% of the money to be distributed under this clause shall be deposited on a weekly basis into the Pennsylvania Sire Stakes Fund as defined in section 224 of the Race Horse Industry Reform Act; and 8 and 1/3% of the money to be distributed under this clause shall be deposited on a weekly basis into a restricted account in the State Racing Fund to be known as the Pennsylvania Standardbred Breeders Development Fund. The State Harness Racing Commission shall, in consultation with the Secretary of Agriculture, promulgate regulations adopting a standardbred breeders program that will include the administration of the Pennsylvania Stallion Award, the Pennsylvania Bred Award and the Pennsylvania Sired and Bred Award. (2.1) For fiscal years 2010-2011 through 2012-2013, distributions from the Pennsylvania Race Horse Development Fund shall be allocated as follows: (i) Each week, 17% of the money in the Pennsylvania Race Horse Development Fund shall be transferred to the General Fund. (ii) Each week, 83% of the money in the Pennsylvania Race Horse Development Fund shall be distributed to each active and operating Category 1 licensee conducting live racing in accordance with the following formula: (A) Divide: (I) the total daily assessments paid, by each active and operating Category 1 licensee conducting live racing, into the Pennsylvania Race Horse Development Fund for that week; by (II) the total daily assessments paid, by all active and operating Category 1 licensees conducting live racing, into the Pennsylvania Race Horse Development Fund for that week. (B) Multiply the quotient under clause (A) by the amount to be distributed under this subparagraph. (iii) The distribution under subparagraph (ii) shall be allocated as follows: (A) The greater of 4% of the amount to be distributed under subparagraph (ii) or $220,000 shall be used to fund health and pension benefits for the members of the horsemen's organizations representing the owners and trainers at the racetrack at which the licensed racing entity operates for the benefit of the organization's members, their families, employees and others in accordance with the rules and eligibility requirements of the organization, as approved by the State Horse Racing Commission or the State Harness Racing Commission. This amount shall be deposited within five business days of the end of each week into a separate account to be established by each respective horsemen's organization at a banking institution of its choice. Of this amount, a minimum of $250,000 shall be paid annually by the horsemen's organization to the thoroughbred jockeys or standardbred drivers organization at the racetrack at which the licensed racing entity operates for health insurance, life insurance or other benefits to active and disabled thoroughbred jockeys or standardbred drivers in accordance with the rules and eligibility requirements of that organization. The total distribution under this clause in any fiscal year shall not exceed $11,400,000. (B) Of the money remaining to be distributed under subparagraph (ii) after application of clause (A), the following disbursements shall be made: (I) Eighty-three and one-third percent of the money to be distributed under this clause shall be deposited on a weekly basis into a separate, interest-bearing purse account to be established by and for the benefit of the horsemen. The earned interest on the account shall be credited to the purse account. Licensees shall combine these funds with revenues from existing purse agreements to fund purses for live races consistent with those agreements with the advice and consent of the horsemen. (II) For thoroughbred tracks, 16 and 2/3% of the money to be distributed under this clause shall be deposited on a weekly basis into the Pennsylvania Breeding Fund established in section 223 of the Race Horse Industry Reform Act. For standardbred tracks, 8 and 1/3% of the money to be distributed under this clause shall be deposited on a weekly basis into the Pennsylvania Sire Stakes Fund as defined in section 224 of the Race Horse Industry Reform Act; and 8 and 1/3% of the money to be distributed under this clause shall be deposited on a weekly basis into a restricted account in the State Racing Fund to be known as the Pennsylvania Standardbred Breeders Development Fund. The State Harness Racing Commission shall, in consultation with the Secretary of Agriculture, promulgate regulations adopting a standardbred breeders program that will include the administration of the Pennsylvania Stallion Award, the Pennsylvania Bred Award and the Pennsylvania Sired and Bred Award. (b) Guidelines.--The board shall establish guidelines that ensure that funds allocated to the horsemen's organization are used to finance the programs to benefit all horsemen of this Commonwealth and that administrative and overhead costs are reasonably related to such programs. (c) Eligible recipients.--Funds allocated to the horsemen's organization under this part must be used to benefit all horsemen. Funds acquired from other sources shall be kept separate and apart from funds obtained under this part. (d) Reasonableness.--Funding for benevolent programs, including, but not limited to, pension, health and insurance plans, will be considered reasonable if such program funding on an annual basis is at least 85% of the total statutory allocation. (e) Filing of audit.--All horsemen's organizations that receive funds under this section shall file annually with the appropriate commission and the board an audit prepared by a certified public accountant of all funds received. Such filings shall be open to public review. The horsemen's organizations shall maintain adequate records concerning receipt and distribution of funds allocated to them. (f) Contracts.--All health and pension benefits contracts shall be reviewed and approved by the board. (g) Penalty.--Any violation of the provisions of this section may subject the horsemen's organization to a fine not to exceed $10,000 per violation. (Nov. 1, 2006, P.L.1243, No.135, eff. imd.; Jan. 7, 2010, P.L.1, No.1, eff. imd.) 2010 Amendment. Act 1 amended subsec. (a). Section 19.6 of Act 1 provided that the amendment of subsec. (a) shall apply retroactively to Jan. 1, 2010. Cross References. Section 1406 is referred to in section 1405 of this title.